Posted by Chuck on November 7, 2019
High-Yield APY Accounts

Published on November 7th, 2019 | by Chuck

25

New Bank Promises 3% APY Savings Rate When You Save 20% Of Your Paycheck (HMBradley)

A new bank called HMBradley promises 3% APY savings rate when you have direct deposit to the account and you save 20% of the direct deposit. The unique system rewards those who save more. When you save 20% of your direct deposit each month you’ll be awarded the full 3% rate. HMBradley uses FDIC insured banks.

Right now the account is on waitlist. When the account becomes available, you’ll have 60 days to open the account and set up direct deposit to be eligible for the rate.

3% is quite a nice rate given the current environment. That said, I’m always skeptical about how long these new fintechs will keep the rate going. Obviously there’s no guarantee. They also make it sound like the 3% rate is something of a ‘bonus’ which sounds like it’s not a long term thing.

I’m a bit confused about when they’ll be paying out the bonus: “And if you sign up today, you’ll start growing a sign up bonus you can claim when we launch.” Sounds like you’ll earn no interest initially, even after depositing money. Then, when they ‘launch’ they’ll pay you a lump sum of all the interest. I don’t know, it all sounds weird. Worth waiting until the dust settles on this one.

Hat tip to reader Andrew



25
Leave a Reply

avatar
 

  Subscribe  
newest oldest most voted
Notify of
Kevin N
Kevin N

20% is too much for most people with relatively low returns and no tax deferral benefits. I’m not sure who they think their customers pool is from.

René
René

The restriction seems impossible to enforce: if you can effort 10%, just split DD your income and save 20% of half your income.

That being said, for now, I put this in the ‘too good to be true’ category.

John
John

I think they will only pay 3% APY on the money that you save from now via real DD? They wont pay for any money you move from another bank?

That will take away the too good to be true part?

Rene
Rene

Maybe. I think 3% these days is too good to be true on any substantial amount. Glad to be wrong here, but I don’t get overly excited for now.

FWIW, the workaround for moving money in would be to save a higher percentage of your DD and use other savings for living expenses.

Tim
Tim

Sure it can’t last forever, but this is how the “new economy” works.

Get a huge load of VC money, shovel it to your customers as fast as you can with huge negative margins while achieving “scale”, and then jump ship for a new company in a couple years before it all goes bust.

I’ll happily take the other side of that deal.

Ralph Hendry-Wabel
Ralph Hendry-Wabel

The bonus won’t be huge: https://hmbradley.zendesk.com/hc/en-us/articles/360035198252-How-is-my-bonus-calculated-

but 3% is interesting if you can stash away 20% assuming they are not dropping the interest rates soon afterwards like crazy.

don’t like the payout to be every 3 months though. Not sure if they compound daily or not

any idea of cancellation terms?

Chris B
Chris B

“Hello. Accounts will be available in early 2020. In the meantime, if you sign up on our waitlist you can earn a bonus 3% APY on your first month of direct deposits when we launch. https://hmbradley.zendesk.com/hc/en-us/articles/360035198252-How-is-my-bonus-calculated-

The waitlist bonus applies to the first month of deposits. After that, your APY will apply to the total account balance going forward. And your APY is determined by the % of your direct deposits that you save.
https://hmbradley.zendesk.com/hc/en-us/articles/360035562351-What-are-Savings-Tiers-
https://hmbradley.zendesk.com/hc/en-us/articles/360035198432-How-do-Savings-Tiers-work-

Wany
Wany

How do they know how much some one is making. For those who can split payroll DD, can that person deposit $1 every pay check and save 100% of that to keep the 3%?

SamL
SamL

And after “establishing” that your monthly income is $1, and you then dump $1,000,000 into the account and get 3% on it all? (Or with less extreme numbers, is there any cap on what balance earns 3%?)

ETA: :We pay interest on total account balances up to $100,000″

John
John
Steve

“We will verify your income based on the first 30 days of actual direct deposits received after opening your new HMBradley account.”
but:
“Deposits to an account that are made by an individual using online banking or other payment provider such as PayPal or Venmo are not qualified as direct deposits.”

Lrdx
Lrdx

I can set up split up the deposit my salary to multiple accounts (I think max 4) with a per account minimum of $1…

Ryan Goldstein

According to https://hmbradley.zendesk.com/hc/en-us/articles/360035542852-Waitlist-Bonus-Qualifying-Terms

“3% APY bonus paid on the total amount of direct deposits made in a new HMBradley account in the first 30 days from the first direct deposit and for the period between customer sign-up on waitlist until accounts are available on hmbradley .com (Bonus not to exceed $500).”

So, in my reading, this really isn’t a 3% account at all – you just get 3% of 30 days worth of direct deposits.

Ryan Goldstein

From https://hmbradley.zendesk.com/hc/en-us/articles/360035198252-How-is-my-bonus-calculated- they give an example of a $6,000 monthly direct deposit; the total bonus would be $7.63.

Steve

30 days at 3% would be $14.80. But: “Bonus is calculated as interest on your daily average balance. Because most people don’t get paid each day, we divide your monthly income by 30 to get a daily amount. For example, if you typically receive payroll totaling $6,000 directly-deposited to your account each month, we will assume you get paid $200.00 each day.”

So they treat your balance as only $200 the first day, $400 (plus interest, making it $400.02) the second day, etc. Roughly giving you half of 3%, or around 1.5%.

But, “and for the period between customer sign-up on waitlist until accounts are available on hmbradley.com” sounds like the bonus period could be longer than 30 days, depending on when they launch.

Also, this is just for the Waitlist Bonus. I think on top of that, you get interest (on the full account balance) at 1% or 1.5% or 2.25% or 3% as described at https://hmbradley.zendesk.com/hc/en-us/articles/360035562351-What-are-Savings-Tiers-

John
John
SamL
SamL

They don’t communicate well. It’s not clear what the “bonus” is. It’s just interest. But it looks like you can get 3% interest on balances up to $100k (if you meet conditions) so this could work for some people. Personally I’ll take 4% from rewards checking accounts (some hoops – not too bad), or use cash as needed for signup bonuses. So I’ll pass, but this is worth a look.

John
John

Here you go. Looks like a $100 direct deposit might work at this point lol. Just save the full $100

https://imgur.com/a/0yQnfoC

MissMBA
MissMBA

Up to 100k! This sounds pretty good except the potential 7 days to withdraw your money noted in the comments. Thanks for posting!

Tim
Tim

If it seems like something that could potentially be interesting, might be worth at least getting in line on the waitlist. All it takes is your name and email.

TJ
TJ

From their FAQ section:

Your HMBradley deposit account is a Negotiable Order of Withdrawal (NOW) account. This type of account lets us pay you interest on all your money. If you would like to learn more about NOW accounts and how they differ from other types of accounts please visit the CFPB’s website.

From CFPB:
With a NOW account, the bank or credit union has the right to require at least seven days written notice of a withdrawal, though this is rarely done.

Dylan
Dylan

I locked in all my cash a few months ago into CDs earning 2.45%. Kind of glad I did this now looking at how rates continue to drop.

Charles Mann
Charles Mann

This gimmick does not sound very profitable. Churning your paychecks thru direct deposit bonuses will net you alot more. Every few months you can change and end up with a much higher percentage on your deposits.

Back to Top ↑